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Trendspotter: Health Reform Will Be Mixed Bag for Physicians


The historic reform bill that Congress passed on Sunday will immediately affect physicians, but the impact will be much greater in the long term.

The historic reform bill that Congress passed on Sunday will immediately affect physicians, but the impact will be much greater in the long term.

First, some expansion of coverage will occur within six months of President Obama’s signature on the bill-whether or not the Senate adopts an accompanying measure that would add House-sponsored changes. The bill will immediately allow parents to cover their young adult children and will prohibit children from being denied insurance because of their health status. Adults can’t have their coverage dropped when they get sick, and people who can’t get coverage because of their health condition will be eligible for beefed-up high risk insurance pools. All of these measures, coupled with small business tax credits for buying insurance, should reduce the number of patients who can’t pay their bills by the end of this year.

The really major impact, however, will come in 2014, when the big Medicaid expansion and the individual mandate to purchase insurance kick in. By 2019,

these provisions will expand coverage

to an estimated 32 million people, providing physicians with many more insured patients.

The health insurance exchanges for uninsured individuals and small businesses will also be launched in 2014.

Health plans that participate

in those exchanges will be required to offer a minimum level of benefits, and catastrophic plans will be available only to those under 30 and those who are exempt from the mandate to buy coverage. Moreover, people who have skimpy plans at work and/or who pay more than 10 percent of their income for it will be able to buy insurance through the exchanges. The plans offered in these government-sponsored markets will also have fairly low out of pocket maximums. All of these provisions, again, will increase the number of patients who are insured and will therefore be able to afford your services-assuming you take Medicaid.

On the other hand, the expansion of coverage will lead to a massive increase in consumer demand that physicians will be expected to handle a few years from now. The legislation does include provisions to increase the supply of primary care, and recent increases in primary-care reimbursement by Medicare-albeit at the expense of specialists-should begin to attract more doctors to the primary-care fields. But much more needs to be done. For one thing, the debt burden of new residency graduates must be reduced if we expect more of them to become, say, internists rather than endocrinologists.

There are also cost control provisions in the bill-

mainly pilots of new Medicare payment approaches

--that could lead to lower reimbursement for physicians. Whether it’s accountable care organizations, payment bundling, or value-based purchasing, the days of unrestricted fee for service are drawing to a close. Many physicians will be unhappy about this. They don’t want to take financial risk, either alone or in tandem with other physicians and hospitals. But some kind of quality-based or budget-based approach to reimbursement, both by government and private payers, is inevitable, because the current level of cost growth is unsustainable. This will probably mean that more physicians will go to work for hospitals, and that small private practices will become less viable. But market forces are already pushing health care in both of those directions.

Meanwhile, Congressional leaders have promised the AMA that they will enact some kind of “fix” to prevent physician Medicare payments from being cut 21 percent this year and more later on. Presumably, they will find some savings in the overall national budget to cover the $200 billion plus cost of that fix over 10 years. But that is isn’t part of the reform legislation that just passed or the reconciliation bill that is now before the Senate.

Obviously, the payment method that has Medicare has used to reimburse physicians for the past decade is not viable and must be replaced. Congress’s last-minute passage of bills to prevent pay cuts to doctors, year after year, is ample proof of that. But there’s no chance that Congress will simply decide to give physicians what they want under fee-for-service Medicare. So get ready for changes in how you’re paid by both Medicare and private payers. This is no longer going to be your father’s healthcare system.

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